Made to Order Mfg

Made to Order Manufacturing (MTO)

This organization is a make-to-order (MTO) business of approximately 100 employees and $10 million in revenue. They had had two successive years of loss and were still going in the wrong direction.

Solutions to Complexes:

Sheets of Paper Eliminated

% On Time Shipment

Hours of Human Effort

$ of Annual Savings

Leading Indicators of Complexes

A new hire going into final assembly takes 6 – 9 weeks to reach a good level of production.

Turnover in final assembly in the previous year was over 100%

Shortest time on job: Four hours including onboarding session of 1.5 hours…they went for lunch and didn’t come back.

Longest service person that resigned: 17 years

Sales bids on projects and the bids are time sensitive

A project bid worth over $200,000 missed the quote deadline

An ERP solution had been purchased several years before

Implementation was over triple the expected cost and late

Employees were using other tools to get around the system

Sales order entry was not using the configuration tool which was a central point for purchasing the solution.

Root Causes of Complexes

Contacting some of the former employees, we discovered that the boss (owner) tended to yell at people and continually change the production plans during the day (sometime within an hour of day shift start up). People don’t like chaos.

The sales bid process goes through several departments and is heavily reliant upon paper-based information and people-based prioritization. Engineering was a major bottleneck.

Found that some paper got ‘lost’, misfiled, ignored, etc.

Lots of ‘politics’ between the sales and engineering management and people within the departments

The ERP solution was highly customized…basically to make it work like the old system. Lack of knowledgeable project management and proper vendor controls. No investment was made in education for the selection team nor was organizational change management considered important.

Solutions to Complexes

The boss is not allowed on the shop floor. Turnover rate dropped to 17% and most of that was due to new personnel not being able to perform the job function adequately. The production manager is managing production and the master scheduler is able to provide accurate ship dates and input into the sales quotation cycle

Engineers were given new Personal Management Objectives based on prioritized throughput.

Eliminated the politics (terminated one engineer that didn’t change)

Engineering manager became ‘acceptance point’ for work coming into the department and produced a schedule of tasks for completion

Re-implementation of the ERP solution

Proper project controls (on time and on budget)

Investment in ERP conceptual education for all salaried and shop supervisory personnel.